EXHIBIT 10.11
XXXXX.XXX INC.
DIRECTORSHIP AGREEMENT
This Agreement is made as of __________ __,1999, by and between
Xxxxx.xxx Inc., a Delaware corporation (the "Corporation"), and the
individual whose name and signature appears on the last page hereof under the
heading "Director," a director of the Corporation (the "Director").
WHEREAS, it is essential to the Corporation that it attract and retain
as directors the most capable persons available and persons who have
significant experience in business, corporate and financial matters; and
WHEREAS, the Corporation has identified the Director as a person
possessing the background and abilities desired by the Corporation and
desires the Director to serve as a member of the Corporation's Board of
Directors; and
WHEREAS, the substantial increase in corporate litigation may, from time
to time, subject directors to burdensome litigation, the risks of which
frequently far outweigh the advantages of serving in such capacity; and
WHEREAS, the costs and availability of directors' and officers'
liability insurance have fluctuated widely over time, and such insurance
contains express and implied limitations on coverage and may involve
protracted claims procedures that prevent the timely payment of losses; and
WHEREAS, the Corporation and the Director recognize that serving as a
director of a corporation at times calls for subjective evaluations and
judgments upon which reasonable men may differ and that, in that context, it
is anticipated and expected that directors of corporations will and do from
time to time commit actual or alleged errors or omissions in the good faith
exercise of their duties and responsibilities; and
WHEREAS, it is now and has always been the express policy of the
Corporation to indemnify its directors to the fullest extent permitted by
law; and
WHEREAS, the Corporation and the Director desire to articulate clearly
in contractual form, their respective rights and obligations with regard to
the Director's service on behalf of the Corporation and with regard to claims
for loss, liability, expense or damage which, directly or indirectly, may
arise out of or relate to such service,
NOW, THEREFORE, the Corporation and the Director agree as follows:
1. AGREEMENT TO SERVE
The Director shall serve as a director of the Corporation for as long as
the Director is duly elected or appointed or until said Director tenders a
resignation in writing.
2. DEFINITIONS
As used in this Agreement:
(a) The term "Proceeding" includes, without limitation, any
threatened, pending or completed action, suit or proceeding, whether brought
in the right of the Corporation or otherwise and whether of a civil,
criminal, administrative or investigative nature, in which the Director may
be or may have been involved as a party, witness or otherwise, by reason of
the fact that the Director is or was a director of the Corporation, or is or
was serving at the request of the Corporation as a director, officer,
employee or agent of another corporation, partnership, joint venture, trust
or other enterprise, whether or not serving in such capacity at the time any
liability or expense is incurred for which exculpation, indemnification or
reimbursement can be provided under this Agreement.
(b) The term "Expenses" includes, without limitation thereto, expenses
of investigations, judicial or administrative proceedings or appeals,
attorney, accountant and other professional fees and disbursements and any
expenses of establishing a right to indemnification under Section 11 of this
Agreement, but shall not include amounts paid in settlement by the Director
or the amount of judgments or fines against the Director.
(c) References to "other enterprise" include, without limitation,
employee benefit plans; references to "fines" include, without limitation,
any excise tax assessed with respect to any employee benefit plan; references
to "serving at the request of the Corporation" include, without limitation,
any service as a director, officer, employee or agent which imposes duties
on, or involves services by, such director, officer, employee or agent with
respect to an employee benefit plan, its participants, or its beneficiaries;
and a person who acted in good faith and in a manner reasonably believed to
be in the interest of an employee benefit plan shall be deemed to have acted
in a manner "not opposed to the best interests of the Corporation" as
referred to in this Agreement.
3. LIMITATION OF LIABILITY
(a) To the fullest extent permitted by law, the Director shall have no
monetary liability of any kind or nature with respect to the Director's
conduct in serving the Corporation or any of its subsidiaries, their
respective stockholders or any other enterprise at the request of the
Corporation, except that this Section 3(a) shall not affect liability of the
Director for:
(i) any breach of the Director's duty of loyalty to the Corporation, such
subsidiaries, stockholders or enterprises;
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(ii) any act or omission not in good faith or which involved intentional
misconduct or a knowing violation of law;
(iii) any transaction from which the Director derived an improper personal
benefit; or
(iv) any unlawful payment of dividends, stock repurchases or redemptions.
(b) Without limiting the generality of (a) above and to the fullest
extent permitted by law, the Director shall have no personal liability to the
Corporation or any of its subsidiaries, their respective stockholders or any
other person claiming derivatively through the Corporation [or the Corporation],
regardless of the theory or principle under which such liability may be
asserted, for:
(i) punitive, exemplary or consequential damages;
(ii) treble or other damages computed based upon any multiple of damages
actually and directly proved to have been sustained;
(iii) fees of attorneys, accountants, expert witnesses or professional
consultants; or
(iv) civil fines or penalties of any kind or nature whatsoever.
4. INDEMNITY IN THIRD PARTY PROCEEDINGS
The Corporation shall indemnify the Director in accordance with the
provisions of this Section 4, if the Director is made a party to any Proceeding
(other than a Proceeding by or in the right of the Corporation to procure a
judgment in its favor), against all Expenses, judgments, fines and amounts paid
in settlement, actually and reasonably incurred by the Director in connection
with such Proceeding if the conduct of the Director was in good faith and the
Director reasonably believed that the Director's conduct was in, or not opposed
to, the best interests of the corporation, and, in the case of a criminal
proceeding, the Director, in addition, had no reasonable cause to believe that
the Director's conduct was unlawful. However, the Director shall not be
entitled to indemnification under this Section 4 in connection with any
Proceeding charging improper personal benefit to the Director in which the
Director was adjudged liable on the basis that personal benefit was improperly
received by the Director unless and only to the extent that the court conducting
such Proceeding or any other court of competent jurisdiction determines, upon
application, that despite the adjudication of liability, the Director is fairly
and reasonably entitled to indemnification in view of all the relevant
circumstances.
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5. INDEMNITY IN PROCEEDINGS BY OR IN THE RIGHT OF THE CORPORATION
The Corporation shall indemnify the Director in accordance with the
provisions of this Section 5, if the Director is made a party to any Proceeding
by or in the right of the Corporation to procure a judgment in its favor,
against all Expenses actually and reasonably incurred by the Director in
connection with such Proceeding if the conduct of the Director was in good faith
and the Director reasonably believed that the Director's conduct was in the best
interests of the Corporation, or at least, not opposed to its best interests.
However, the Director shall not be entitled to indemnification under this
Section 5 in connection with any issue, claim or matter in a Proceeding to the
extent that the Director has been adjudged liable to the Corporation with
respect to such issue, claim or matter unless and only to the extent that the
court conducting such Proceeding or any other court of competent jurisdiction
determines upon application, that, despite the adjudication of liability, the
Director is fairly and reasonably entitled to indemnification in view of all the
relevant circumstances.
6. INDEMNIFICATION OF EXPENSES OF SUCCESSFUL PARTY
Notwithstanding any other provisions of this Agreement, to the extent that
the Director has been successful, on the merits or otherwise, in defense of any
Proceeding or in defense of any claim, issue or matter therein, the Corporation
shall indemnify the Director against all Expenses incurred in connection
therewith.
7. EXCLUSIONS
Notwithstanding any provision in this Agreement, the Corporation shall not
be obligated under this Agreement to make any indemnification in connection with
any claim made against the Director:
(a) to the extent to which any payment has been made to or on behalf of
the Director with respect to such claim under any insurance policy;
(b) if a court having jurisdiction in the matter finally determines that
such indemnification is not lawful under any applicable statute or public policy
(and, in this respect, both the Corporation and the Director have been advised
that in the opinion of the Securities and Exchange Commission indemnification
for liabilities arising under the Securities Act of 1933 is against public
policy and is, therefore, unenforceable and that claims for such indemnification
should be submitted to appropriate courts for adjudication unless, in the
opinion of counsel, the matter has been settled by controlling precedent);
(c) in connection with any Proceeding (or part of any Proceeding)
initiated by the Director, or any Proceeding by the Director against the
Corporation or its directors, officers, employees or other persons entitled to
be indemnified by the Corporation, unless (i) the Corporation is expressly
required by law to make the indemnification, (ii) the Proceeding was authorized
by the Board of Directors of the Corporation, or (iii) the Director initiated
the
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Proceeding pursuant to Section 11 of this Agreement and the Director is
successful in whole or in part in the Proceeding;
(d) in connection with any proceeding by or on behalf of the Corporation
to recover short-swing profits pursuant to Section 16(b) of the Securities and
Exchange Act of 1934.
8. ADVANCES OF EXPENSES
The Corporation shall pay the Expenses incurred by the Director in any
Proceeding in advance of the final disposition of the Proceeding at the written
request of the Director, if the Director: furnishes the Corporation a written
undertaking to repay the advance to the extent that it is ultimately determined
that the Director is not entitled to be indemnified by the Corporation. Such
undertaking shall be an unlimited general obligation of the Director but need
not be secured, except as otherwise provided herein.
Advances pursuant to this Section 8 shall be made no later than ten days
after receipt by the Corporation of the undertaking described in this Section 8,
and, except as provided in Section 10, shall be made without regard to the
Director's ability to repay the amount advanced and without regard to the
Director's ultimate entitlement to indemnification under this Agreement. The
Corporation may establish a trust, escrow account or other secured funding
source for the payment of advances made and to be made pursuant to this Section
8 or of other liability incurred by the Director in connection with any
Proceeding.
9. NONEXCLUSIVITY AND CONTINUITY OF RIGHTS
The indemnification, advancement of Expenses and exculpation from liability
provided by this Agreement shall not be deemed exclusive of any other rights to
which the Director may be entitled under any other agreement, any certificate of
incorporation, bylaws or vote of shareholders or directors, or otherwise, both
as to action in the Director's official capacity and as to action in another
capacity while holding such office. The indemnification under this Agreement
shall cover the Director's service as a director and all of his acts in such
capacity, whether prior to or on or after the date of this Agreement, and such
indemnification shall continue as to the Director even though the Director may
have ceased to be a director of the Corporation or a director, officer, employee
or agent of an enterprise related to the Corporation and shall inure to the
benefit of the heirs, executors, administrators and personal representatives of
the Director.
10. PROCEDURE UPON APPLICATION FOR INDEMNIFICATION
Any indemnification under Sections 4, 5, or 6 shall be made no later than
45 days after receipt of the written request of the said Director, unless a
determination is made within such 45-day period by (a) the Board of Directors by
a majority vote of directors who were not parties to the applicable Proceeding,
even though less than a quorum; (b) a committee of such directors designated by
a majority vote of such directors, even though less than a quorum;
(c) independent legal counsel in a written opinion; or (d) a majority vote of
the shareholders, that, on the basis of
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facts then known the said Director is not entitled to indemnification under
this Agreement. In the event that the board, committee, independent counsel
or shareholders cannot reasonably determine entitlement to indemnification
within the 45-day period, the director shall be entitled to an advancement of
the amount of the indemnification requested, subject to such security for
repayment as the board of directors may require.
11. ENFORCEMENT
The Director may enforce any right to indemnification or advances provided
by this Agreement in any court of competent jurisdiction if (a) the Corporation
denies the claim for indemnification or advances, in whole or in part, or (b)
the Corporation does not dispose of such claim within the time period required
by this Agreement. It shall be a defense to any such enforcement action (other
than an action brought to enforce a claim for advancement of Expenses pursuant
to, and in compliance with, Section 8 of this Agreement) that the Director is
not entitled to indemnification under this Agreement. However, except as
provided in Section 13 of this Agreement, the Corporation shall have no defense
to an action brought to enforce a claim for advancement of Expenses pursuant to
Section 8 of this Agreement if the Director has tendered to the Corporation the
affirmation and undertaking required thereunder. The burden of proving by clear
and convincing evidence that indemnification is not appropriate shall be on the
Corporation. Neither the failure of the Corporation (including its Board of
Directors or independent legal counsel) to have made a determination prior to
the commencement of such action that indemnification or advancement of expenses
is proper in the circumstances because the Director has met the applicable
standard of conduct nor an actual determination by the Corporation (including
its Board of Directors or independent legal counsel) that indemnification is
improper because the said Director has not met such applicable standard of
conduct, shall be a defense to the action or create a presumption that the
Director is not entitled to indemnification under this Agreement or otherwise.
The Director's expenses incurred in connection with successfully establishing
the Director's right to indemnification, advances or exculpation, in whole or in
part, in any Proceeding shall also be indemnified by the Corporation.
The termination of any Proceeding by judgment, order of court, settlement,
conviction or upon a plea of NOLO CONTENDERE, or its equivalent, shall not, of
itself, create a presumption that (a) the Director is not entitled to
indemnification under Sections 4 or 5 of this Agreement, or (b) the Director is
not entitled to exculpation under Section 3 of this Agreement.
12. NOTIFICATION AND DEFENSE OF CLAIM
Not later than 90 days after receipt by the Director of notice of the
commencement of any Proceeding, the Director shall, if a claim in respect of the
Proceeding is to be made against the Corporation under this Agreement, notify
the Corporation of the commencement of the Proceeding. The omission to notify
the Corporation will not relieve the Corporation from any liability which it may
have to the Director otherwise than under this Agreement. With respect to any
Proceeding as to which the Director notifies the Corporation of the
commencement:
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(a) The Corporation shall be entitled to participate in the Proceeding at
its own expense.
(b) Except as otherwise provided below, the Corporation may, at its
option and jointly with any other indemnifying party similarly notified and
electing to assume such defense, assume the defense of the Proceeding, with
legal counsel reasonably satisfactory to the Director. The Director shall have
the right to use separate legal counsel in the Proceeding, but the Corporation
shall not be liable to the Director under this Agreement, including Section 9
above, for the fees and expenses of separate legal counsel incurred after notice
from the Corporation of its assumption of the defense, unless (i) the Director
reasonably concludes that there may be a conflict of interest between the
Corporation and the Director in the conduct of the defense of the Proceeding, or
(ii) the Corporation does not use legal counsel to assume the defense of such
Proceeding. The Corporation shall not be entitled to assume the defense of any
Proceeding brought by or on behalf of the Corporation or as to which the
Director has made the conclusion provided for in (i) above.
(c) If two or more persons who may be entitled to indemnification from
the Corporation, including the Director, are parties to any Proceeding, the
Corporation may require the Director to use the same legal counsel as the other
parties. The Director shall have the right to use separate legal counsel in the
Proceeding, but the Corporation shall not be liable to the Director under this
Agreement, including Section 8 above, for the fees and expenses of separate
legal counsel incurred after notice from the Corporation of the requirement to
use the same legal counsel as the other parties, unless the Director reasonably
concludes that there may be a conflict of interest between the Director and any
of the other parties required by the Corporation to be represented by the same
legal counsel.
(d) Notwithstanding any other provision of this agreement, the
Corporation shall not be liable to indemnify the Director under this Agreement
for any amounts paid in settlement of any Proceeding effected without its
written consent, which shall not be unreasonably withheld. The Director shall
permit the Corporation to settle any Proceeding that the Corporation assumes the
defense of, except that the Corporation shall not settle any action or claim in
any manner that would impose any penalty or limitation on the Director without
the Director's written consent, which may be given or withheld in the said
Director's sole discretion.
13. PARTIAL INDEMNIFICATION
If the Director is entitled under any provisions of this Agreement to
indemnification by the Corporation for some or a portion of the Expenses,
judgments, fines or amounts paid in settlement, actually and reasonably incurred
by the Director in connection with such Proceeding, but not, however, for the
total amount thereof, the Corporation shall nevertheless indemnify the Director
for the portion of such Expenses, judgments, fines or amounts paid in settlement
to which the Director is entitled.
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14. SEVERABILITY
If this Agreement or any portion thereof shall be invalidated on any ground
by any court of competent jurisdiction, then the remainder of this Agreement
shall continue to be valid and the Corporation shall nevertheless indemnify the
Director as to Expenses, judgments, fines and amounts paid in settlement, and
advance Expenses, with respect to any Proceeding, to the fullest extent
permitted by any applicable portion of this Agreement that shall not have been
invalidated or by any other applicable law.
15. SUBROGATION
In the event of payment under this Agreement, the Corporation shall be
subrogated to the extent of such payment to all of the rights of recovery of the
Director. The Director shall execute all documents required and shall do all
acts that may be necessary to secure such rights and to enable the Corporation
effectively to bring suit to enforce such rights.
16. NOTICES
All notices, requests, demands and other communications under this
Agreement shall be in writing and shall be deemed to have been duly given
(a) upon delivery by hand to the party to whom the notice or other communication
shall have been directed, (b) on the first business day after the date on which
it is mailed if sent by nationally recognized overnight courier service, or
(c) on the third business day after the date on which it is mailed by certified
or registered mail with postage prepaid, addressed as follows:
(i) If to the Director, to the address indicated on the signature page of
this Agreement, below said Director's signature.
(ii) If to the Corporation, a copy to each of:
Xxxxx.xxx Inc.
000 Xxxxx XxXxxxx Xxxxxx
Xxxxx 000
Xxxxxxx, Xxxxxxxx 00000
Attention: Chief Financial Officer
Xxxxx.xxx Inc.
000 Xxxxx XxXxxxx Xxxxxx
Xxxxx 000
Xxxxxxx, Xxxxxxxx 00000
Attention: General Counsel
or to any other address as either party may designate to the other in
writing.
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17. COUNTERPARTS
This Agreement may be executed in any number of counterparts, each of which
shall constitute the original.
18. APPLICABLE LAW
This Agreement shall be governed by and construed in accordance with the
internal laws of the State of Delaware without regard to the principles of
conflict of laws.
19. SUCCESSORS AND ASSIGNS
This Agreement shall be binding upon the Corporation and its successors and
assigns.
IN WITNESS WHEREOF, the parties hereby have caused this Directorship
Agreement to be duly executed and signed as of the day and year first above
written.
CORPORATION:
XXXXX.XXX INC.
a Delaware corporation
Attest:_________________________ By:___________________________
Xxxxxx X. Xxxxxxx Xxxxxx X. Xxxxxxx
Chief Financial Officer, Chairman of the Board and
Treasurer and Secretary Chief Executive Officer
DIRECTOR:
_______________________________
Address:
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